【ZB】China’s New Central Bank Head Is Pro-Market, Could It Impact Cryptocurrency Industry?

Yi Gang, an American-trained economist, has been elected by the Chinese government to take over the People’s Bank of China (PBoC), the country’s central bank, as its head. The election of a pro-market economist could have a positive impact on the cryptocurrency market.

Pro-market, favors freedom

Both Chinese President Xi Jinping and PBoC’s new leader Yi Gang are pro-market and pro-market reform. Prior to his election, Yi has consistently emphasized the importance of market liberalization, and has invited economists along with experienced financial experts who could support his long-term plan to increase the flexibility of the Chinese market.

Already, within weeks since the election of Yi, the Chinese government has, for the first time, allowed foreign companies to enter the country’s payment sector and compete against local giants like e-commerce conglomerate Alibaba’s AliPay and the country’s largest technology corporation Tencent’s Tencent Pay.

For context — Tencent’s gaming successes

For context, China’s Tencent, which has made a series of successful acquisitions over the past few years including Riot Games, the game development company behind one of the most popular online games — League of Legends (LOL), surpassed the market valuation of Facebook in November 2017. Tencent became the first Asian company to break the $500 bln mark, and outdistanced Facebook prior to its Cambridge Analytica Scandal, which led Facebook to decline by nearly $70 bln drop from $517 bln to $445 bln.

In 2016, it was revealed that more viewers watched LOL, the game developed by Riot Games under Tencent, than the NBA finals. LOL’s professional esports league finals were hosted in the Beijing National Stadium, also known as Bird’s Nest, which has a capacity of 91,000 people. The NBA finals were watched by 31 mln people worldwide, while the LOL finals were watched by 36 mln people internationally.

The success of Tencent and its dominance over the global esports industry as well as social media, messaging, and payment markets is important to acknowledge because for the first time in its history, the Chinese government has given the company competition in the finance sector.

Payment market for foreign companies

On March 21, Bloomberg reported that the Chinese government has officially opened the gates of its $27 trln payments market to foreign companies, and has allowed companies to apply for licenses. Iris Pang, a Hong Kong-based economist at ING Groep NV, told Bloomberg:

“The domestic market is quite saturated with very strong domestic players, and it is relatively hard for foreign companies to get a piece of the pie. But there is a chance for them to compete in the cross-border payment market.”

In other markets like social media, search engines, and messaging, the Chinese government has banned conglomerates like Facebook and Google from operating within the country for various reasons, but mainly to ensure that domestic platforms such as QQ and YouKu can take control over the entire market with 100 percent of the market share.

The move of the Chinese government and the PBoC to allow foreign companies into its payment sector was unprecedented, and such a positive movement towards market liberalization could inevitably lead to speculations around the cryptocurrency market and its stance towards it.

From：Cointelegraph

Details：www.zb.com